Business glossary
Accounts payable
Amounts a business owes suppliers for goods or services already received.
Example
A supplier sends a $900 invoice for materials delivered this month. Until it is paid, the business has $900 of accounts payable. When payment clears, that supplier balance decreases.
How it differs from related terms
Accounts payable is a liability to suppliers. Accounts receivable is the opposite: money customers owe your business. Match a supplier invoice to the delivery and approval record before scheduling payment.
Frequently asked questions
What is an example of accounts payable?
A supplier sends a $900 invoice for materials delivered this month. Until it is paid, the business has $900 of accounts payable. When payment clears, that supplier balance decreases.
How should accounts payable be interpreted?
Accounts payable is a liability to suppliers. Accounts receivable is the opposite: money customers owe your business. Match a supplier invoice to the delivery and approval record before scheduling payment.